Can health care be a magic bullet for the Midwest? (Part 3)

Oct 19, 2011

Detroit is the latest metro area vying to become a medical destination. The hope is that its hospital systems can draw patients from outside its region, helping the local economy.

In short, Detroit wants to be more like Cleveland.

But Cleveland could be tough to copy.

Cosgrove comes to Cleveland

In 1975, a young cardiologist arrived in Cleveland.

“I came here in a rented truck with a Vega on the back end because it was too sick to pull,” Toby Cosgrove says.

Jump ahead 36 years and that newbie with a beater of a car is now CEO of the Cleveland Clinic.

Cosgrove presides over a medical empire vastly larger than when he came to town hoping to get better at heart surgery.

“We were about 140-150 doctors. We’ve grown a bit since that time. We’re now about 3,000,” he says.

The Clinic has become a centerpiece of an industry that employs roughly 70,000. That includes places like University Hospitals next door, and Summa Health in Akron.

Growth has been rapid.

University Hospitals alone has added 4,000 workers in the last few years and, expansions have been pegged at about $3 billion in construction spending.

IT worker makes a timely career change

George Rouse is a nurse who made his own transition before the rest of the region.

“My friends were like: are you crazy? Are you nuts?” he recounts.

About 15 years ago, Rouse was working in IT for a manufacturing company.

“I had a very good living with that company but I’m like: what if this would ever end? What would I do next?” Rouse says.

His premonition was right. His former employer closed up shop a few years ago.

No one thinks he’s crazy now.

“When I’m driving to work, the last two years, for all of us, you know, our houses have dwindled down to nothing, our 401ks have shrunk down,” he says. “I mean, all these pieces are crumbling.”

While it worked for Rouse, health care is no replacement for manufacturing.

Health jobs make up about 11 percent of the workforce.

In its heyday—say the 50s and 60s—manufacturing jobs employed 40 percent of Clevelanders.

“Health care became the big generator of jobs by accident,” says Chris Seper, founder of MedCityNews.

Cleveland’s hospitals have been growing for nearly a century, but it’s only been in the last decade that health care has become the center of economic development.

“The health care system here and the life sciences industry here does as much as it possibly can. But there’s a limit to what they can do,” Seper says.

Cleveland never really set out to become a health care capital. Cleveland Clinic CEO Toby Cosgrove says it’s not like some politician stood at a podium many years ago.

“No, nobody raised their hand and said they’re going to push this organization to the front,” Cosgrove said.

The Clinic’s international reputation can be traced back to advances in heart care in the 50s and 60s.

Now, patients arrive from around the country and world for heart procedures.

Foreign patients often pay cash.

The future of health care as a jobs engine

Bringing patients in is the holy grail for cities like Detroit that want to be like Cleveland, but even at the Clinic, only one percent of its patients are international.

Paul Ginsburg is president of the Center for Studying Health System Change.

“But when you really look at the numbers of some places that are really strong in medical tourism, it’s not that large a part,” Ginsburg said, adding that there are other reasons why health care may not be a good economic driver for regions.

For one, building more hospitals often means people consume more care, which means we all pay more in taxes and insurance. Whether any city can sustain this much expansion is a big question.

And, the industry is changing, shifting more to home care and so-called telemedicine. Already, smaller hospitals are outsourcing difficult diagnoses to places like the Cleveland Clinic.

Chris Seper of MedCityNews says that will make it even harder for cities trying to embrace health care as their future.

“I think if you’re building health care systems and hospitals as an idea that they’re going to be your jobs growth engine, it’s a lose-lose situation,” Seper said.

Cosgrove of the Clinic says we may end up with nationwide chains, the way banks have consolidated over the years. So, if you’re trying to copy Cleveland, good luck.